Three essays in supply chain management

Globalization of business results in significant changes and severe competition. These macro forces lead to international integration and improved performance standards. Products with contracting life cycles demand the whole supply chain to react effectively with flexibility. Together with the rapid development of information technology and recent moves in e-business, all these macro factors have forced business enterprises to restructure their supply chains. An important dimension of supply chain restructuring is to improve coordination amongst supply chain members to optimize overall performance. In many industries, we observe increasing activities in supply chain coordination through new coordination mechanisms and/or information sharing. At the same time, because incentives are not aligned, we also observe reluctance to adopt these new initiatives.; The main objective of this thesis is to model problems in supply chain regarding some new coordination mechanisms and information sharing to better understand the related incentive issues. We hope to identify some managerial insights to enhance better coordination within a supply chain. The main issues being addressed in this thesis are the followings: (1) There are new coordination mechanisms transferring the right to make stock level decision and the responsibility to keep stock to upstream. How will these changes influence incentives in the supply chain? Are there any arrangements such that all parties in a supply chain will be better off by adopting these new coordination mechanisms? (2) Transferring the responsibility to carry inventory from downstream to upstream often also requires information sharing but such information sharing may not be enforced by contract. In that case; will the downstream be willing to share information with the upstream voluntarily? (3) Demand information asymmetry also exists in traditional supply chain and upstream's capacity choice is heavily dependent on the demand information it obtained from downstream. What are the conditions for the downstream to voluntarily reveal the private information about demand? Knowing the answers to these questions help us to better understand incentive issues to enhance better supply chain coordination.; The main analytical results of this thesis are: (1) These new coordination mechanisms affect each supply chain member's payoff. However, as long as the stock level that upstream desires is higher than the one downstream desires, we find that upstream and downstream can always find a risk-sharing rule such that adoption of these new coordination mechanisms, along with the risk-sharing rule, will always lead to higher expected payoffs for both of the supply chain members. (2) Under those new coordination mechanisms, we find that, in general, if downstream receives a market demand signal that is greater than a cut off value, he will reveal it to upstream voluntarily; otherwise, he will not reveal. The cut off value is a function of downstream's information revealing cost, upstream's critical fractile and its prior belief of the demand signal. (3) We get similar results for the problem of capacity choice under traditional supply chain. But in this problem, whether or not downstream will share demand information to the upstream voluntarily is also dependent on downstream's critical fractile.